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http://ssrn.com/abstract=1566943
 
 

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The European Insider Trading Regulation after the ECJ’s Spector Photo Group Decision


Lars Klöhn


Ludwig-Maximilians-Universität München - Faculty of Law


European Company and Financial Law Review (ECFR,) February 2010

Abstract:     
Securities laws around the world agree that purchasing or selling financial instruments in possession of non-public, price-relevant information does not by itself constitute insider dealing. However, requiring more than the knowing possession of such information while trading – e.g. requiring some kind of fraudulent intent – might impede the effectiveness of any insider trading prohibition. Therefore, securities laws worldwide have to answer the question what exactly constitutes the mens rea requirement of insider trading. In a recent preliminary ruling, the European Court of Justice (“ECJ”, the “Court”) answered this question for the EU insider trading prohibition in Art. 2(1) of Directive 2003/6/EC (“Market Abuse Directive”, “MAD”). After discussing the factual background and reasoning of the decision [I)], this article provides an assessment from a comparative and methodological perspective, arguing that the Court should have exercised more judicial self-restraint [II)1) and II)2)]. It concludes with a summary of the most important dogmatic questions raised by Spector [II)3)].

Number of Pages in PDF File: 21

Keywords: insider trading, insider dealing, market abuse, securities regulation, ECJ, EU-Law, Spector

JEL Classification: K22

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Date posted: March 10, 2010  

Suggested Citation

Klöhn, Lars, The European Insider Trading Regulation after the ECJ’s Spector Photo Group Decision. European Company and Financial Law Review (ECFR,) February 2010. Available at SSRN: http://ssrn.com/abstract=1566943

Contact Information

Lars Klöhn (Contact Author)
Ludwig-Maximilians-Universität München - Faculty of Law ( email )
Ludwigstr. 29
Munich, 80539
Germany
HOME PAGE: http://www.jura.uni-muenchen.de/personen/k/kloehn_lars/index.html
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